Fiscal Year 2011 1st HALF RESULTScmic-test.r-cms.jp/files/user/en/corporate/pr/pdf/ss20110513.pdf · Chairman and CEO Kazuo Nakamura. Corporate Officer (Finance) Wataru Mochizuki

Chairman and CEO

Kazuo NakamuraCorporate Officer (Finance)

Wataru

MochizukiMay 13, 2011

CMIC CO., LTD.CMIC CO., LTD. Fiscal Year 2011Fiscal Year 2011 1st HALF RESULTS1st HALF RESULTS

Fiscal Year 2011 1st HalfFiscal Year 2011 1st Half CONSOLIDATED FINANCIAL CONSOLIDATED FINANCIAL RESULTSRESULTS

Corporate Officer (Finance)

Wataru

Mochizuki

3

FY2011

New Reportable Segments

Healthcare BusinessHealthcare BusinessHealthcare Business

Other BusinessOther BusinessOther Business

CRO

BusinessCROCRO

BusinessBusiness

CMO

BusinessCMOCMO

BusinessBusiness

CSO

BusinessCSOCSO

BusinessBusiness

Monitoring servicesMonitoring services

Data Management servicesData Management services

Strategic & Regulatory affairs consulting serviceStrategic & Regulatory affairs consulting service

Preclinical drug evaluation study servicePreclinical drug evaluation study service

SMO (Clinical research‐disease control)

servicesSMO (Clinical research‐disease control)

services

Contract MR (Medical Representative) servicesContract MR (Medical Representative) services

Medical Communication

with Academic Support

servicesMedical Communication

with Academic Support

services

WEB Site BusinessWEB Site Business

General Personnel Dispatch serviceGeneral Personnel Dispatch service

Clinical Research serviceClinical Research service

Drug/IMP Manufacturing servicesDrug/IMP Manufacturing services

Healthcare BusinessHealthcare BusinessHealthcare Business

IPD

BusinessIPDIPD

BusinessBusiness

CRO

BusinessCROCRO

BusinessBusiness

CMO

BusinessCMOCMO

BusinessBusiness

CSO

BusinessCSOCSO

BusinessBusiness

Monitoring servicesMonitoring services

Data Management servicesData Management services

Strategic & Regulatory affairs consulting serviceStrategic & Regulatory affairs consulting service

SMO (Clinical research‐disease control)

servicesSMO (Clinical research‐disease control)

services

Contract MR (Medical Representative) servicesContract MR (Medical Representative) services

Medical Communication with Academic Support servicesMedical Communication with Academic Support services

WEB Site BusinessWEB Site Business

Development of intellectual propertyDevelopment of intellectual property

General Personnel Dispatch serviceGeneral Personnel Dispatch service

Drug/IMP Manufacturing servicesDrug/IMP Manufacturing services

Analytical Chemistry servicesAnalytical Chemistry services

Development of intellectual propertyDevelopment of intellectual property

Clinical Research serviceClinical Research service

4

Segment InformationReportable

segments

Principal services The Company and its affiliates(2011/3/31)

CRO

Business Services provided to pharmaceuticals companies

related to support for drug development

CMIC Co.,Ltd.CMIC Korea Co.,Ltd.CMIC ASIA‐PACIFIC,PTE.LTD.CMIC(Beijing) Co.,Ltd.

CMO

Business Services provided to pharmaceuticals related to

support for drug manufacturing , including ethical

drugs and over‐the‐counter (OTC) drugs, as well as

analytical chemistry services

CMIC Co.,Ltd.CMIC CMO Co.,Ltd.CMIC CMO TOYAMA Co.,Ltd.Institute of Applied Medicine,Inc.CMIC CMO USA CorporationCMIC CMO Korea Co.,Ltd.

CSO

Business Services provided to pharmaceuticals companies

related to support for drug sales and marketing

CMIC MPSS Co.,Ltd.MDS Co.,Ltd.

Healthcare

Business

Services provided to medical institutions, patients and

consumers related to support for medical treatment

and health maintenance and enhancement, such as

SMO operations and healthcare information services

CMIC Co.,Ltd.Site Support Institute Co.,Ltd.Medical Vita Co.,Ltd.Healthclick

Co.,Ltd.CMIC‐BS Co.,Ltd.FUJIFILM CMIC HEALTHCARE Co.,Ltd

IPD

Business Operations related to the development and marketing

of diagnostic drugs, orphan drugs and other products

CMIC Co.,Ltd.*Red : Overseas

5

Financial Summary

Net Sales 33.1% increase (from FY2010 H1)

Operating Income

7.6% increase (from FY2010 H1)

CRO BusinessRobust operating results in monitoring service and data management serviceCMO BusinessSales increase : Addition of CMIC CMO and new contracts undertaken by CMIC CMO TOYAMAIncluded converting The Institute of Applied MedicineCSO BusinessContract MR service increaseOperating loss : delay in commencement of new project and recruitment costsHealthcare BusinessSMO service : On par with the level of the corresponding period of the previous fiscal yearClinical Research service : Operating lossIPD BusinessL‐FABP

: Commenced sales in JapanOrphan Drug : Developing (3 drugs)

6

Consolidated Profit & Loss( JPY million )

Sales 16,029 100.0% 21,335 100.0% 33.1%

Operatingincome

2,057 12.8% 2,214 10.4% 7.6%

Ordinaryincome

2,132 13.3% 2,235 10.5% 4.9%

Net income 1,086 6.8% 1,038 4.9% (4.4%)

Net income pershare (Yen) 61.76 58.38

FY2010 H1

Growth rate(yoy)

FY2011 H1

Actual % Actual %

Sales 16,029 100.0% 21,335 100.0% 33.1%

Operatingincome

2,057 12.8% 2,214 10.4% 7.6%

Ordinaryincome

2,132 13.3% 2,235 10.5% 4.9%

Net income 1,086 6.8% 1,038 4.9% (4.4%)

Net income pershare (Yen) 61.76 58.38

FY2010 H1

Growth rate(yoy)

FY2011 H1

Actual % Actual %

Performance surpassed the same period from last year (Sales, Operating income, Ordinary income)‐

double‐digit revenue growth.‐

the recognition of an extraordinary loss of ¥168 million accompanying the application of the

Accounting Standard for Asset Retirement Obligations.*Current term net income per share reflects the stock split executed on April 1, 2011

7

Sales % Sales %

CRO Business 7,229 45.1% 8,088 37.9% 859

CMO Business 2,809 17.5% 6,905 32.4% 4,096

CSO Business 1,636 10.2% 2,194 10.3% 558

Healthcare Business 4,560 28.4% 4,554 21.3% (6)

IPD Business 7 0.1% 19 0.1% 13

(211) (1.3%) (425) (2.0%) (214)

Total 16,029 100.0% 21,335 100.0% 5,305

Elimination of internaltransactions

FY2010 H1 changes insales

FY2011 H1

Sales % Sales %

CRO Business 7,229 45.1% 8,088 37.9% 859

CMO Business 2,809 17.5% 6,905 32.4% 4,096

CSO Business 1,636 10.2% 2,194 10.3% 558

Healthcare Business 4,560 28.4% 4,554 21.3% (6)

IPD Business 7 0.1% 19 0.1% 13

(211) (1.3%) (425) (2.0%) (214)

Total 16,029 100.0% 21,335 100.0% 5,305


FY2010 H1 changes insales

FY2011 H1

Financial Summary ‐Segment Sales‐( JPY million )

8

OperatingIncome

operatingprofit ratio

OperatingIncome


CRO Business 1,269 17.5% 1,607 19.9% 338

CMO Business 168 6.0% 546 7.9% 378

CSO Business 49 3.0% (75) ‐ (124)

Healthcare Business 725 15.9% 330 7.3% (395)

IPD Business (158) ‐ (192) ‐ (34)

4 ‐ (2) ‐ (6)

Total 2,057 12.8% 2,214 10.4% 157

FY2010 H1 changes inprofit

FY2011 H1


OperatingIncome


OperatingIncome


CRO Business 1,269 17.5% 1,607 19.9% 338

CMO Business 168 6.0% 546 7.9% 378

CSO Business 49 3.0% (75) ‐ (124)

Healthcare Business 725 15.9% 330 7.3% (395)

IPD Business (158) ‐ (192) ‐ (34)

4 ‐ (2) ‐ (6)

Total 2,057 12.8% 2,214 10.4% 157

FY2010 H1 changes inprofit

FY2011 H1


Financial Summary ‐Segment Operating Income‐( JPY million )

9

Orders BacklogOrders



CRO Business 10,032 19,731 6,216 18,016 8,293 18,389

CMO Business*

3,082 2,356 7,758 3,646 5,497 2,259

CSO Business 2,487 1,991 2,253 2,500 1,986 2,445

HealthcareBusiness

4,690 8,646 4,309 9,287 5,924 10,741

IPD Business 23 27 (6) ‐ 19 ‐

Total 20,314 32,750 20,531 33,450 21,720 33,834

FY2010 H1 FY2011 H1FY2010 H2

Orders / Backlog Orders( JPY million )

* Backlog orders listed under CMO Business only include secured orders.

Although annual order schedules are provided by clients, these do not necessarily constitute a secured order and are

therefore not included in the results.

10

8,787

14,336 15,105

1,687

1,8011,908

1,730

2,9583,042

8,0757,587

7,082

6,096 9,009

11,201

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2010/3/31 2010/9/30 2011/3/31

Cash and Depos i tsNotes and Accounts Receivable‐tradeWork in ProcessOther Current AssetsTota l Noncurrent Assets

Consolidated Balance Sheet ‐Assets‐

33,267

( JPY million )

36,651

30,488Cash and deposits

+2,913

Total Assets

+3,385

Notes and Accounts

receivable‐trade

(488)

Work in Process

+85

Noncurrent assets

+769

capital

investment1,141

Depreciation and amortization1,227

11

Consolidated Balance Sheet ‐Liabilities and Net Assets‐

15,512 15,639 16,430

7,782 8,24110,002

1,718 1,981

2,5755,989

6,077

4,546

1,416

1,568

929

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2010/3/31 2010/9/30 2011/3/31

Notes and Accounts Payable‐tradeOther Current Liabi l i tiesOther Noncurrent Liabi l i tiesInterest‐bearing Liabi l i tiesTota l Net Assets 33,267

( JPY million )

36,651

30,488Other current liabilities

+89

Notes and accounts

payable‐trade

+151

Other noncurrent liabilities

+593

Interest‐bearing liabilities

+1,760

Total net assets

+791

12

Consolidated Statements of Cash Flows

2010

H1 2011 H1 Changes

Cash flows from

operating activities 382 2,723 2,340

Cash flows from

investing activities (787) (1,185) (398)

Cash flows from

financing activities 5,457 1,371 (4,086)

Net increase (decrease)

in cash and cash

equivalents

5,069 2,912 (2,157)

Cash and cash

equivalents at

beginning of period

5,513 5,483 (30)

Cash and cash

equivalents at

beginning of period

10,582 8,395 (2,187)

Prime factor

(Cash flows from operating activities)

‐Proceeds : Income before income taxes

and minority interests

(Cash flows from investing activities)

‐Purchase

: property, plant and

equipment and intangible assets

*Mainly capital

investment

in CMO

(Cash flows from financing activities)

‐Proceeds

: long‐term loans payable

from financial institutions

( JPY million )

FY2011 Consolidated FY2011 Consolidated Results ForecastResults Forecast

14

FY2011 Forecasts ‐Consolidated‐

FY2010 FY2011

Result Forecast Percentage

change

Net sales 35,862 41,900 +16.8%

Operating

income3,311 3,700 +11.7%

Ordinary

income3,215 3,600 +12.0%

Net income 1,786 1,800 +0.8%

3,700

3,311

2,514

8.8%8.7%9.2%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2009/9 2010/9 2011/9E5%

6%

7%

8%

9%

10%

11%

12%

13%Operating incomeOperating profit ratio

FY2011Net Sales

¥41,900

million

Operating Income ¥3,700

million

( JPY million )

( JPY million )

15

FY2010 FY2011

Sales (Actual) Sales (Estimate) FY2011 /FY2010

CRO

Business 15,266 15,900 +4.2%

CMO

Business 9,312 13,400 +43.9%

CSO

Business 3,534 4,450 +25.9%

Healthcare Business 8,333 9,000 +8.0%

IPD

Business 18 50 +177.8%

Elimination of internal transactions

(602) (900) ‐

Total 35,862 41,900 +16.8%

( JPY million )

FY2011 Forecasts ‐Segment Sales‐

16

FY2011 Forecasts ‐Cash Dividends‐

10.813.3

16.7

26.5 26.5

10.8

26.5%

13.7%

16.3%

27.7% 26.1%

0

5

10

15

20

25

30

35

2006/9 2007/9 2008/9 2009/9 2010/9 2011/9E0%

10%

20%

30%Cash Dividends

Dividends Payout Ratio

( Yen )

Our company executes a stock split ratio of 20 shares per common

share, with April 1, 2011

as the effective date.The above graph shows the results after the pertinent stock split adjustment.

Business StrategyBusiness Strategy

Chairman and CEO

Kazuo Nakamura

18

11

22

33

44

Contents of today's discussion

Business environmentBusiness environment

CMICCMIC’’ss

directional goaldirectional goal

Current status of operationsCurrent status of operations

CMIC group's current statusCMIC group's current status

19

Innovative new drug seeds, shortage of evaluation methodsStricter basis of approval across the globeIncrease in global studiesMedical system reform and medical cost control policy

US: Medical system reform legislation establishedJapan: Reduction of drug costs upon patent term expiration

Push towards the use of generic drugsPromotion of open innovation by pharmaceutical companies, such as the utilization of new drug development ventures

Promoting efficient management by utilizing external resources, in addition to internal management resources

Trend of Pharmaceutical Companies

20

Impact of the Great East Japan Earthquake

Impact on the pharmaceutical industryImpact on the pharmaceutical industry Impact on CMICImpact on CMIC

PerformancePerformance

DevelopmentDevelopment

ProductionProduction

SalesSales

Extraordinary losses centered around stricken plants and distribution centersExtraordinary losses centered around stricken plants and distribution centers

Impact on consolidated earnings is expected to be minorImpact on consolidated earnings is expected to be minor

Lack of entries due to stricken medical facilities and patientsLack of entries due to stricken medical facilities and patients

Impact is minor at this timePossible impact on a portion of the SMO business in the Tohoku (Northeast) region

Impact is minor at this timePossible impact on a portion of the SMO business in the Tohoku (Northeast) region

Production line and distribution stoppage due to the disasterTemporary supply increase and added inventoryReview of the production system (electrical supply and risk hedging)

Production line and distribution stoppage due to the disasterTemporary supply increase and added inventoryReview of the production system (electrical supply and risk hedging)

Impact on production is minorReceived inquiries from various pharmaceutical companies to be a potential part of their dispersed base

Impact on production is minorReceived inquiries from various pharmaceutical companies to be a potential part of their dispersed base

Self‐imposed restraint on promotional activitiesSelf‐imposed restraint on promotional activities

Impact is minor at this timePossible impact on promotional material planning and production operations

Impact is minor at this timePossible impact on promotional material planning and production operations

21

11

22

33

44



CMICCMIC’’ss




22

Our Business Domain

CROContract Research Organization

CSO

CMO

HealthcareServices for medical institutes,

patients and general consumers

IPDIntellectual Property

DevelopmentContract Manufacturing

Organization

Contract Sales

Organization

23

Create added value through cooperation between operations.Provide overall support throughout the pharmaceutical value chain.Also, help foreign companies move into Japan and help Japanese companies move overseas.

CROCMO CMO CSO

Business Method

PVC (Pharmaceutical Value Creator)

Pharmaceutical

design and

manufacturing

Pharmaceutical

design and

manufacturing

Production of

investigational

product

Production of

investigational

product

ApprovalApproval ProductionProduction Sales and

marketing

Sales and

marketing

Clinical

trials

Clinical

trials

24

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '110

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

024681012141618

20(%)

Operating

Income ratio

Operating

Income

( JPY million )Sales

SalesOperating IncomeOperating Income Ratio

Financial Performance

Revised Japanese PharmaceuticalAffairs Law in 2005

New GCP In 1997

( JPY million )

25

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

( Number of Employees )

Number of Employees

26

CMIC Group Offices

CMIC KoreaCMIC KoreaCMIC CMO KoreaCMIC CMO KoreaCMIC(Beijing)CMIC(Beijing)

ShanghaiShanghai

CMIC AsiaCMIC Asia‐‐PacificPacific

TaiwanTaiwan

CMICCMIC

CMO USACMO USA

Number of branches/offices : 31（ Number of Plant : 2）（ Number of Labo

: 5）

OfficesHokkaido（Sapporo・Asahikawa）、

Miyagi、Saitama、Tokyo（Shinagawa・

Shibuya・Bunkyo）、 Kanagawa、

Toyama、Ishikawa、Shizuoka、Aichi、

Oosaka、Hyogo、Okayama、Kagawa、

Ehime、Hiroshima、Fukuoka、Nagasaki、

Ooita、Kumamoto、Kagoshima

LabsHokkaido（Sapporo・Asahikawa）、Tokyo

PlantsShizuoka、Toyama

Number of Overseas Offices

：

8（ Number of Plant : 2

）

OfficesKorea、China（Beijing,Shanghai）Singapore,

Taiwan,Thailand

PlantsKorea,

USA

ASEAN BranchASEAN Branch

BrazilBrazilClinical Clinical

ResearchResearchCenterCenter

27

11

22

33

44



CMICCMIC’’ss




28

Our Business Domain


CSO

CMO





Organization

Contract Sales

Organization

29

84 156241

389501

614 710831

955

482514

500 421

1,1321,0251,129

286221

8531

8

403

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

affiliated companies

member companies

( JPY 100 millions )

Source : Japan CRO Association

Japan CRO Market

Number of Japan CRO

Association members

26 27 32 37 39 41 41 35 28

‐

Total sales of CRO and its affiliated companies ‐

Restructuring of Japan's CRO market will progress as we enter the maturity period

CRO

3030

Environment of Clinical Trials in Japan

Expansion of developmental items by foreign companiesIncrease in global studies and Asian studiesChange in Japan's position within AsiaChange in trend of new drug development

( response to unmet medical needs )Cost pressuresMore stringent screenings related to safetyExpansion of outsourcing needs in foreign companies (full outsourcing of CRA, etc.)

CRO

31

4,899 5,341 5,132

1,8622,270

468

566 735

2,189

0

2,000

4,000

6,000

8,000

10,000

FY2010 H1 2010 H2 2011 H1

Strategic and Regulatory Affairs Consulting, OverseasDatamanagementMonitoring

1,269

1,6071,543

19.2% 19.9%

17.5%

0

500

1,000

1,500

2,000

2010 H1 2010 H2 2011 H10%

5%

10%

15%

20%

25%

30%

35%Operating Income

Operating Income Ratio

8,037

Business Result ‐CRO‐[ Net Sales ] [ Operating Income ]

( JPY million )

8,088

7,229

internal

transactions

(59)

[ Net Sales ] Robust operating results in monitoring service and data management service[ Operating Income ] Overall operating income increased along with high operating ratio

( JPY million )

internal

transactions

(49)

CRO

32

Increasing Global Studies

Souse：Pharmaceuticals and Medical Devices Agency

No. of

INDGlobal Studies

( % )■Total No. of IND

■No. of Global Studies

0

50

100

150

200

250

300

0

5

10

15

20

25

30

FY2007Apr.‐Sep

FY2007Oct.‐Mar.

FY2008Apr.‐Sep.

FY2008Oct.‐Mar.

FY2009Apr.‐Sep.

FY2009Oct.‐Mar.

CRO

33

China CRO Market

21

221

297

365

0

50

100

150

200

250

300

350

400

2005 2008 2009 2010


China's CRO market continues to grow rapidly, however, barriers of entry exist due to exclusive regulations and business practices

* Converted at $1=85JPY based on PhRMA, Frost & Sullivan data

CRO

34

TaiwanTaiwan

SingaporeCMIC AsiaCMIC Asia‐‐PacificPacific

MalaysiaMalaysia

PhilippinesPhilippines

Hong Hong KongKong

Registered Office

Project‐based Operation

Development in Asia

CMIC Co., Ltd.JapanCMIC Korea Co., Ltd.CMIC Korea Co., Ltd.

CMIC (Beijing) Co., Ltd.CMIC (Beijing) Co., Ltd.

Beijing, Shanghai

CMIC AsiaCMIC Asia‐‐Pacific Pacific PtePte. Ltd. . Ltd. Singapore, Taiwan

ASEAN

Branch

ThailandThailand

GCPGCP

CMICCMIC

ClinPlusClinPlus

BeijingBeijing

CRO

http://www.freewebs.com/lduknight/MalaysiaFlag.jpghttp://www.google.com.tw/imgres?imgurl=http://www.mapsofworld.com/images/world-countries-flags/philippines-flag.gif&imgrefurl=http://www.mapsofworld.com/flags/philippines-flag.html&h=265&w=390&sz=19&tbnid=XpJN70T7J0NxxM:&tbnh=84&tbnw=123&prev=/images%3Fq%3Dphilippines%2Bflag&zoom=1&q=philippines+flag&hl=zh-TW&usg=__il2ZXavm34U44mkvl8IBz2C6coY=&sa=X&ei=6BO0TNSMFoOAvgOl2uDNCg&ved=0CAkQ9QEwAAhttp://www.google.com.tw/imgres?imgurl=http://www.travelblog.org/World/flags/hong-kong-large-flag-hk.gif&imgrefurl=http://www.travelblog.org/Asia/Hong-Kong/fact-flag-hong-kong.html&h=302&w=453&sz=4&tbnid=jwkObG3odg-bgM:&tbnh=85&tbnw=127&prev=/images%3Fq%3Dhong%2Bkong%2Bflag&zoom=1&q=hong+kong+flag&hl=zh-TW&usg=__LdUTYvqedOnlglFR4uhqCK6QP04=&sa=X&ei=YRS0TJ7lMJCOvQPLtMHKCg&ved=0CAkQ9QEwAAhttp://www.google.com.tw/imgres?imgurl=http://sleeplessintaipei.com/wordpress/wp-content/uploads/2008/12/taiwan-flag.jpg&imgrefurl=http://www.sleeplessintaipei.com/page/3/&h=400&w=600&sz=15&tbnid=J5y3W40uZbR5XM:&tbnh=90&tbnw=135&prev=/images%3Fq%3Dtaiwan%2Bflag&zoom=1&q=taiwan+flag&hl=zh-TW&usg=__QjiGUgomT9vtmqAtnnlx21CCQ7w=&sa=X&ei=nxa0TIXSAY-wvgO9qam1Cg&ved=0CAkQ9QEwAAhttp://ja.wikipedia.org/wiki/%E3%83%95%E3%82%A1%E3%82%A4%E3%83%AB:Flag_of_South_Korea.svghttp://ja.wikipedia.org/wiki/%E3%83%95%E3%82%A1%E3%82%A4%E3%83%AB:Flag_of_Japan.svg

35

Strengthening of global studies contract system Make 21% capital participation to GCP ClinPlus, a Chinese local CRO, in order to strengthen its services in China to its pharmaceutical customers

Preparation of clinical trial implementation system

Changes in the organizational structure relevant to Asia

Introduction of a new clinical trial management system that corresponds to global studies

Strengthening of the marketing structure in the Asia regionOpened ASEAN Branch

CROStrengthening of Asia Development System

36

Our Business Domain


CSO

CMO





Organization

Contract Sales

Organization

37

CMO Market Scale Transition in Japan

119146

174200

225245

640609

580553

526501

477434

395

359326

296269

462440419

399380

362345328

313298284

270257

0

100

200

300

400

500

600

700

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2002‐07 CAGR+15%

10% (07‐14),5% (14‐20) CAGR

5% CAGR

( JPY billion ) Expected market size : 450 ‐

650 billion yenCAGR

: Compound Annual Growth Rate

Growth led by the growing needs of outsourcing services from pharmaceutical firms

Source: Booz&Co. performanceperformance projectionprojection

CMO

38

Production Bases

of CMIC

CMIC CMO Korea Co., Ltd

Manufacturing

services include :

Liquid

for internal

use, Ointment,

Cream, Gel

CMIC CMO

USAManufacturing

services include :

Tablets (uncoated

and film‐coated

tablets), Capsules,

seamless‐mini

Capsules

CMIC

CMO [Shizuoka]Manufacturing

capacity: Tablet

formulations: 1.5

billion/year, Capsule

formulations: 500

million

capsules/year, Granule/powder

formulations: 200

tons/year

Manufacturing

services include :

Ointment, Cream,

Gel, Lotion,

Suppository, Liquid,

Tooth paste etc.Manufacturing

services (packaging)

include : Blister

package (PTP) and

Strip package (SP)

for Tablets, Capsules

etc.

CMIC CMO Toyama

CMO

http://ja.wikipedia.org/wiki/%E3%83%95%E3%82%A1%E3%82%A4%E3%83%AB:Flag_of_South_Korea.svghttp://ja.wikipedia.org/wiki/%E3%83%95%E3%82%A1%E3%82%A4%E3%83%AB:Flag_of_the_United_States.svghttp://ja.wikipedia.org/wiki/%E3%83%95%E3%82%A1%E3%82%A4%E3%83%AB:Flag_of_Japan.svghttp://ja.wikipedia.org/wiki/%E3%83%95%E3%82%A1%E3%82%A4%E3%83%AB:Flag_of_Japan.svg

39

3,6784,100

857

1,179

1,298

454

489

377

1,366

1,063

1,036

98

133

94

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2010 H1 2010 H2 2011 H1

CCS(Shizuoka) CCT(Toyama) CCU(US)

CCK(Korea) IAM

( JPY million )

2,809

Business Result ‐CMO‐[Net Sales] [ Operating Income ]

546

190168

6.0%

7.9%

2.9%

0

100

200

300

400

500

600

2010 H1 2010 H2 2011 H10%

5%

10%

15%

20%Operating Income

Operating Income Ratio6,9056,503

( JPY million )

internal

transactions

(5)

[ Net Sales ] Contribution of CMIC CMO and new contracts undertaken by CMIC CMO TOYAMA[ Operating Income ] Secure profit increase despite periodic CMIC CMO inspection during Q2

CMO

(Institute of Applied Medicine)

40

Growth Strategy of CMO

Expansion of Production

Improvement of Efficiency

Future : Contract manufacturing from clinical to commercial

drugs

Future : Contract manufacturing from clinical to commercial

drugs

1st : Transfer from a plant to a

service provider

1st : Transfer from a plant to a

service provider

CMIC CMO

2nd : Increase of production by new orders2nd : Increase of production by new orders

3rd : Enhancement of formulation development

technology

3rd : Enhancement of formulation development

technology

FutureFuture

3rd

STEP3rd

STEP

2nd

STEP2nd

STEP

1stSTEP1stSTEP

Coordination with IAMSpur technological aptitude

CMIC CMO

TOYAMACMIC CMO USACMIC CMO Korea

CMO

Made capital investments this period in order to expand contract

capacity(increased production lines and set up pharmaceutical development system)

41

Our Business Domain


CSO

CMO





Organization

Contract Sales

Organization

42

CSO

Business

CMIC MPSS Co.,

LtdContract MR (Medical Representative)MR TrainingMarket Assessment

PatientCMIC MPSS

Contract MR

Contract MR

Medical

workers

Sales

Sales

Medical

Consultation

Academic

information

Wholesaler(E

thical drugs)

Pharma

(Ethical

drugs)

CSO

43

CSO

Business

MDS Co., Ltd.

Medical Communication with Academic SupportAcademic ServiceAdvertising & Promotion

Promotion StrategyPromotion Materials

CSO

44

49

(75)

46

3.0% 2.4%

(200)

(150)

(100)

(50)

0

50

100

150

200

2010 H1 2010 H2 2011 H1

‐10%‐9%‐8%‐7%‐6%‐5%‐4%

‐3%‐2%‐1%0%1%2%3%4%5%6%7%8%9%10%Operating Income


908 801

1,203

991

7281,098

0

500

1,000

1,500

2,000

2,500

2010 H1 2010 H2 2011 H1

CMIC MPSS MDS

( JPY million )[ Net Sales ] [ Operating Income ]

[ Net Sales ] Revenue of both CMIC MPSS and MDS increased[ Operating Loss ] Delay in start of new project and accrual of recruitment costs ( in MPSS )

1,636

2,194

1,898

Business Result ‐CSO‐( JPY million )

CSO

45

Contract MR Market in Japan

630

550

480

310

370

420

0

100

200

300

400

500

600

700

2008 2009 2010 2011 2012 2013

( JPY 100 million )

Average 15%

growth

*CMIC Estimate

CSO

46

Market Share

51%

11%

7%

6%

*CMIC Estimated

MPSS

Market share among various CSO companies (FY 2010)

Aim for second highest market share by 2013

CSO

47

455

816

1826

2943

65 89(134) (69)

300

158

85

49

(500)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2008/9 2009/9 2010/9 2011/90

50

100

150

200

250

300

350

Sales

Operating income

Numer of MR

Transition of MPSS Business Results and MR

6 12 22 27

CSO

Number of Client

( JPY million ) ( Number of MR )

Establish profits for this fiscal year, while making prior investments for further scale expansion

48

Our Business Domain


CSO

CMO





Organization

Contract Sales

Organization

49

3,6453,173

3,557

373

170

463

350

254

279

216

249

343

0

1,000

2,000

3,000

4,000

5,000

6,000

2010 H1 2010 H2 2011 H1

SSI CMIC(Healthcare)

Healthclick CMIC‐BS

( JPY million )[ Operating Income ]

[ Net Sales ] On par with the level of the corresponding period of the previous fiscal year[ Operating Loss ] Incurred by clinical research projects

330

(37)

725

7.3%

15.9%

(100)

100

300

500

700

900

2010 H1 2010 H2 2011 H10%

5%

10%

15%

20%Operating Income


3,773

[ Net Sales ]

4,5544,560

HC

( JPY million )

Business Result ‐Healthcare‐

internal

transactions

(23)

internal

transactions

(72)

internal

transactions

(89)

50

Site Support Institute Co., Ltd.

(SSI)

The largest The largest SMOSMO

in Japanin Japan

*SMA

: Site Management Associate

Kagoshima

Kumamoto

FukuokaOsaka

Okayama

Nagoya

Aomori

Hokkaido( Sapporo )

Tokyo

Kagawa

Hiroshima

Toyama/Ishikawa

Miyagi

Hyogo

Ehime

Oita

Nagasaki

Hokkaido( Asahikawa

)

Shizuoka

Kanagawa

Saitama

Iwate

Number of branches/offices : 23

Number of employees : 765CRC : 522

SMA* : 112

Protocol performance : 1,791on‐going : 489

Number of sites : 1,787University Hospitals : 50

Hospitals : 625

Clinics : 1,112

HC

5151

SMO Market Environment in JapanMarket will generally level off and experience low growth

Increase in global studies and range of incurable diseases

Concentration towards major companies with established track records and many partner facilities, as well as the weeding out and restructuring of small and mid‐size SMO’s will progress

213

292337 340 343 358 347

050

100150200250300350400450

2003 2004 2005 2006 2007 2008 2009

Total sales of member companies


Source : Japanese Association of Site Management Organization*2006 : CMIC estimated

HC

52

Transition of SSI Orders / Backlog Orders / Sales

6,8017,327

4,837

7,7188,318

9,639

0

2,000

4,000

6,000

8,000

10,000

12,000

2009 2010 2011 H1

OrdersBacklog Orders

( JPY million )

5,9616,727

3,516

0

2,000

4,000

6,000

8,000

10,000

12,000

2009 2010 2011 H1

[ Orders / Backlog Orders ] [ Sales ]( JPY million )

HC

53

Shift in the proportion of orders received at SSI ‐

total orders and major orders ‐

[ percentage of total orders ]

Total orders and major orders at SSI increased

[ percentage of major orders ]

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2009 2010 2011 H1

SalesNumber of projects

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2009 2010 2011 H1

SalesNumber of projects

HC

54

604762

1,173

1,562

1,787

0

500

1,000

1,500

2,000

2,500

2007.2 2008.2 2009.2 2010.2 2011.2

Number of sites

Transition of SMO Business

Market share expansion through increased partner facilities and marketing capabilities

Merger withMEDICAL TRIALS

Merger withMEDICAL VITA

HC

55

Our Business Domain


CSO

CMO





Organization

Contract Sales

Organization

56

Our Company’s IPD OperationWhat is IPD?Intellectual Property Development= Business with anticipatory investment and its own intellectual

properties

Intellectual

Property

What is CMIC’s

intellectual properties?Patent, license and approval bring compensation

and consideration

Enhanced Value of Intellectual Property

Selling the entire intellectual property

Consignment selling, holding intellectual property

IPD

57

[ Operating Loss ] Account for R&D costs (for Orphan Drugs)

19

117

0

5

10

15

20

25

30

35

40

45

50

2010 H1 2010 H2 2011 H1

L‐FABP

( JPY million )

(192)

(487)

(158)

(800)

(600)

(400)

(200)

0

200

[ Net Sales ] [ Operating Income ]

2011 H12010

H22010

H1

Business Result ‐IPD‐( JPY million )

IPD

58

Prognosis Marker Prognosis Marker LL‐‐FABPFABP DevelopmentDevelopment

[ CMIC holds a patent in JP/US/EU ]

59

Approved for in vitro diagnosis (IVD) and received reimbursement in JapanRegarded as promising prognosis marker for kidney disease in

both chronic kidney disease (CKD) and acute kidney injury (AKI) fields.

Pharmaceutical screeningTransgenic mouse, we had developed as “humanized kidney model”, contributes to acceleration of drug screening with lower nephrotoxicity.

Usefulness in clinical developmentEvaluation as an early indicator of pharmacologic responses to a

therapeutic intervention and which effectiveness can be shorter clinical trials.

IPDBusiness strategy of L‐FABP biomarker project

60

L‐FABP Licensing Business

Patent for inspection method using L‐FABPDomestic and international diagnostic product

manufacturing and marketing approval

Internal development and marketing Licensing

Roche DiagnosticsA leader in the world diagnostic

product market

GenzymeA leading company in the field of

biotechnology

Sep. 2010

Received approval for

manufacture and marketing.

Offered license to a big clinical

diagnostics company Fujirebio

Inc.

Signed an exclusive domestic

sales contract with its subsidiary

TFB, Inc.

IPD

61

Start of domestic salesJan 17, 2011 TFB began selling the "Human L‐type fatty acid‐binding protein kit (Brand name: “Renapro®L‐FABP Test)”

L‐FABP TopicsIts usefulness as a marker was also recognized overseas“L‐FABP measurements are useful in early prognosis and detection of diabetic nephropathy” – published in a thesis review in Nature Reviews magazine

The Steno Diabetes Center, (2010) Nature

Reviews Nephrology

“A new urinary marker predicts

progression to albuminuria

and risk of

death in patients with type 1 diabetes

mellitus”

IPD

62

Orphan Drug DevelopmentOrphan Drug Development

63

Meaning of Orphan Drug Development

Societal Contribution

Accumulation of Expertise in Development

Enriched relationships with specialized doctorsCollection of comprehensive knowledge and experience ( License and handling of government )

Business Pursuit ( Royalty Business )

IPD

64

Partners

Ucyclyd

Pharma

Inc.

SodiumPhenylbutyrate

Urea Cycle

Disorders (UCDs)

Orphan Europe

Human HeminAcute Attacks of Hepatic

Porphyria

Dyax

EcallantideHereditary Angioedema(HAE)

Domestic development right and sales right

Royalty

revenue

Domestic Development Licensing Agreements IPD

65

Orphan Drug Development StatusCMK‐No. CMK‐001 CMK‐304 CMK‐507

Orphan Drug Human Hemin Sodium Phenylbutyrate Ecallantide

Product Name Normosang® Buphenyl® Kalbitor®

Indication Acute Porphyria Urea Cycle Disorders Hereditary

Angioedema

(HAE)

Licensor Orphan EuropeUcyclyd(Medicis)

Dyax

Availability for sales EU: on sales US/EU: on salesUS: on sales

EU: under examination

Japan

NDA 2011

H2 2011

H2 2013

H1

Approval 2012

H2 2012

H2 2014

H1

*NDA and approval timing are currently

scheduled but they would be changed by

progress status of the

development.

IPD

66

11

22

33

44



CMICCMIC’’ss




67

CMIC’s Unique Business Model

Japan KKJapan KK

Overseas pharmaceutical

companies

found

Support

Approval and Sales

Contract ServiceContract Service

‐‐DevelopmentDevelopment

‐‐ManufacturingManufacturing

Another

pharmaceutical

company

Approval and Sales

Overseas & domestic pharmaceutical companies, and bio‐

tech companies

ContractContract

ServiceService

‐‐developmentdevelopment‐‐ManufacturingManufacturing

Another

pharmaceutical

company

（

Overseas &

domestic ）

Contract sales

Development, Approval Development, Approval

and Manufacturingand Manufacturing

Company X： Marketing Approval

Development, Manufacturing and Development, Manufacturing and

SalesSales

A B

C DOverseas pharmaceutical companies, and bio‐tech

companies

Overseas & domestic pharmaceutical companies, and bio‐

tech companies

68

Comprehensive contracting throughout the pharmaceutical industry value chain is possible.

Contracting achievements in all fields: development, production, marketing, and sales

The largest CRO, SMO and CMO in JapanThe CMIC Group includes the largest CRO and SMO enterprises in Japan and boasts a rich variety of development projectsAccumulated development know‐howCMIC can now handle almost all types of formulations.

CMIC can act as an ICC (in country caretaker)

Track Records in Multinational Clinical TrialsTrack Records in global studies and Asian studiesCMIC provides services for one of the largest global pharma as its preferred vendor

Promotion of Intellectual Property Development (IPD)We aim to accumulate intellectual property and develop a new revenue model.

Competitive Edge of PVC Model

69

CROCROCRO

Annual Sales Target in FY2016 ‐

¥100 billion

‐

¥¥100 billion100 billion

CRO/SMO30%

CMO30%

CSO30%

IPD10%

¥¥3535..88

billionbillion

CRO48.6%

CMO19.2%

CSO9.3%

HC1.4%

Others2.5%

IPD0.0％

SMO19.0%

FY2010 FY2016

Conventional CRO

Group of skilled

individuals Working

on pharmaceutical

development

Corporate Value= Sustainable Profit

Strive to Be a Business Innovator of the PVC Model

70

Thank you for your attention.

CMIC CO., LTD.�Fiscal Year 2011�1st HALF RESULTSFiscal Year 2011 1st Half�CONSOLIDATED FINANCIAL RESULTSFY2011 New Reportable Segments　Segment InformationFinancial SummaryConsolidated Profit & Loss　Financial Summary -Segment Sales-Financial Summary -Segment Operating Income-Orders / Backlog OrdersConsolidated Balance Sheet -Assets-Consolidated Balance Sheet -Liabilities and Net Assets-Consolidated Statements of Cash Flows　FY2011 Consolidated Results ForecastFY2011 Forecasts -Consolidated-FY2011 Forecasts -Segment Sales-スライド番号 16Business StrategyContents of today's discussionスライド番号 19Impact of the Great East Japan EarthquakeContents of today's discussionスライド番号 22スライド番号 23Financial Performanceスライド番号 25CMIC Group OfficesContents of today's discussionスライド番号 28スライド番号 29Environment of Clinical Trials in Japanスライド番号 31スライド番号 32China CRO MarketDevelopment in Asiaスライド番号 35スライド番号 36CMO Market Scale Transition in Japanスライド番号 38スライド番号 39Growth Strategy of CMOスライド番号 41スライド番号 42スライド番号 43スライド番号 44Contract MR Market in JapanMarket Shareスライド番号 47スライド番号 48スライド番号 49Site Support Institute Co., Ltd. (SSI)SMO Market Environment in JapanTransition of SSI Orders / Backlog Orders / Salesスライド番号 53Transition of SMO Businessスライド番号 55Our Company’s IPD Operationスライド番号 57スライド番号 58Business strategy of L-FABP biomarker projectL-FABP Licensing BusinessL-FABP Topicsスライド番号 62Meaning of Orphan Drug Developmentスライド番号 64スライド番号 65Contents of today's discussionCMIC’s Unique Business Model 　Competitive Edge of PVC Modelスライド番号 69スライド番号 70

Documents

Fiscal Year 2011 1st HALF RESULTScmic-test.r-cms.jp/files/user/en/corporate/pr/pdf/ss20110513.pdf · Chairman and CEO Kazuo Nakamura. Corporate Officer (Finance) Wataru Mochizuki